UK – The £10.1bn (€14.8bn) British Coal Staff Superannuation Scheme has said it cut its £600m global fundamental equity mandate with Goldman Sachs Asset Management because it lost confidence in the product – and that further assets may be “relocated”.
The scheme had pulled £4.8bn from GSAM when it revamped its investment structure in 2003, saying the move was to diversify and reduce single manager risk. And it pulled the further £600m in July 2004.
“These were removed when we lost confidence in the product,” the scheme reveals in a newsletter for members. “It is intended that at least some of these assets will be relocated to the other layers of the structure as part of the 2005 triennial review.”
Ted Sotir, co-head of Goldman Sachs Asset Management in Europe, told IPE that the firm took steps in 2004 to address poor performance with senior hires from Franklin Templeton, Mark Beveridge and William Howard.
He said: “Since Mark and William joined, the global fundamental equity strategy has returned 11.05% net, outperforming the MSCI World by 157 basis points.”
The new investment structure is working, the newsletter said, pointing to the fact that for the year to March 31 2005, the fund outperformed by 0.93% compared to the 0.58% expected under the old structure.
It said: “This additional 0.35% of outperformance in cash terms was worth approximately £34m based on the fund value for April 2005.
“So the improved investment arrangements may have cost us some £4m per annum – but they have increased income by some £34m.”
Scheme assets rose by £1.04bn over the year, reflecting strong equities markets.